Grain and livestock open higher on Monday morning and then turn mixed.
Brad Kooima, Kooima Kooima Varilek, says cattle saw gains to start the session with the sharply higher cash trade Thursday but futures aren’t able to hold early strength.
It is tied to the risk off selling in the S&P and general market place.
However, he says the cattle market has had days it’s been able to divorce itself from the stock market due to strong fundamentals.
So, long term Kooima says as long as cash market can stay strong it will override the outside market noise.
Cash trade was strong in the South last week at $208 to mostly $210, up $6. The North traded $212 to $215 to a major packer, which on the top side was $7 higher than the previous week. Dressed prices were $332 to $335, up $4 to $7.
The USDA Cattle on Feed Report was neutral to slightly bearish with the placements total at 105.1%, which was above expectations.
However, Kooima points out this is compared to an extremely small placements figure in March of 2024.
“Other than the COVID year the number we got Thursday was the second smallest so yeah slightly bigger than last year but still the second smallest other than 2020 in the last 10 years so you’re spot on. Extremely small placement numbers still.”
Lean hog futures hold early gains with fund buying and stronger cash and cutouts.
Grain markets started higher with the new lows in the U.S. dollar index fueling some additional buying by managed money traders.
However, many of the grain market contracts are running into chart resistance again just like they did last week and need to take those areas out to keep the fund buying going.
Kooima says he’s not sure if the buying is tied to just the dollar weakness or the weather but he points out the grain markets may seem a bit undervalued to traders.
